Image: Nuance Communications.

The technology world moves fast, and voice-recognition specialist Nuance Communications (NASDAQ:NUAN) has struggled to keep up with the pace of change in the industry. Yet even though its role in the development of the Siri app for iPhone hasn't led to the huge success that some investors expected years ago, Nuance has moved forward in building relationships with companies like Samsung (NASDAQOTH: SSNLF) as part of its broader corporate transformation. Coming into Monday's fiscal fourth-quarter financial report, Nuance investors were prepared to see continued pressure on the company's top and bottom lines but wanted evidence that the company was still making progress. Nuance gave investors most of what they wanted to see, with better-than-expected financial results and favorable views going forward. Let's take a closer look at how Nuance Communications did this quarter and what's ahead for the fiscal year to come.

Nuance speaks, investors listen
Nuance's fiscal fourth-quarter results continued the company's streak of producing solid results that came out ahead of what many investors had feared. Adjusted revenue fell 1.3% to $513.3 million, but that was just half the drop that most investors were expecting to see from Nuance. The company posted another GAAP loss, but after allowing for its adjustments to GAAP treatment, Nuance posted adjusted earnings of $0.41 per share, beating the consensus forecast by $0.06 per share as adjusted net income rose 20% to $129.6 million.

Looking more closely at Nuance's numbers, you can see plenty of differences among the company's four key businesses. Healthcare was once again the top performer from a sales perspective, producing a 1% gain in year-over-year organic growth. The Mobile and Consumer market also held up well, with organic sales falling 1% but with an acquisition-driven rise of more than 6% in overall segment revenue. Meanwhile, the Enterprise and Imaging segments remained weak, with double-digit percentage drops in organic sales and segment revenue.

Segment profits closely followed the revenue results. Healthcare adjusted earnings jumped 10% to $93.7 million, making up more than half of Nuance's total profit. The mobile and consumer segment saw profits jump by more than half, but once again, Enterprise and Imaging lagged with sizable declines.

Still, Nuance had good things to say about most of its businesses. The Imaging segment, for instance, booked large enterprise deals with Samsung and the Social Security Administration, with print-and-capture solutions remaining important to the space. Samsung in particular could be a gateway to even greater future growth, given its leadership role in the mobile space.

Recurring revenue continues to play a vital role for Nuance, making up more than two-thirds of its total revenue. At the same time, though, deferred revenue has soared, hitting $668.2 million after a 22% rise from the year-ago quarter.

CFO Dan Tempesta saw Nuance's results as strong. "We made substantial progress on our companywide transformation project," Tempesta said, "and continued to prioritize resources and focus toward our most significant market opportunities. The CFO sees further progress in the year ahead.

What's ahead for Nuance?
In general, Nuance believes that the same trends it saw in fiscal 2015 will continue into the next year. The company thinks full-year fiscal 2016 net new bookings to grow between 2% and 5%, with Enterprise, Diagnostics, Dragon Medical, and Clintegrity leading the way forward. Revenue growth in the enterprise arena, as well as in automotive, mobile operator services, and print-and-scan solutions, should overcome headwinds from the handset business.

All in all, Nuance thinks adjusted revenue for fiscal 2016 will be between $1.98 billion and $2.03 billion, with first-quarter adjusted sales of $486 million to $498 million. Adjusted earnings should be $1.35 to $1.45 per share for the full year, with first-quarter adjusted earnings projections ranging from $0.31 to $0.33 per share. Those figures are all consistent with the current consensus among investors following Nuance, and the prospects for accelerating earnings growth along with even a small rise in the top line have many shareholders excited about the company's transformation. Moreover, with nearly half of its $1 billion stock repurchase plan still available, Nuance will likely keep returning capital to shareholders in a stock-friendly way in 2016 as well.

Nuance investors celebrated the news, sending the stock up nearly 8% in the first hour of after-market trading following the announcement. With so much progress, Nuance investors are excited at what 2016 could bring for the company and its long-term future.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.